Greek GDP shrinks 6.2 percent in quarter

PIRAEUS, Greece, Aug. 13 (UPI) -- Greece's economy contracted 6.2 percent in the second quarter compared to a year earlier, the Hellenic Statistical Authority said Monday.

The independent data office said the sharp contraction was slightly less agonizing than the first quarter annual rate of retreat of 6.5 percent.

Still, data points to a long-term recession that is, arguably, a depression, The New York Times reported Monday.

As of May, the unemployment rate reached 23.1 percent, up from 22.6 percent in April.

The country, meanwhile, has seen negative growth in its economy since 2008. The economy is 18 percent smaller than it was at the time Lehman Brothers bank failed -- that failure an international symbol of the almost global financial meltdown.

Now tied to a $160 billion international lifeline for the Greek government, Prime Minister Antonis Samaras is proposing further spending cuts to meet the demands of the so-called troika, the European Central Bank, European Commission and International Monetary Fund, which is demanding budget discipline as terms for the loans.

In March, the government said it would trim the government deficit to 7.3 percent of the gross domestic product in 2012 and to 4.6 percent in 2013.

Some economists fear the repeated spending cuts have created a vicious downward spiral, as government support for the economy is in retreat, which creates a smaller economy that prompts less in tax revenues.

Economist Sarah Hewin at the Standard Chartered Bank in London said the second quarter was especially bumpy with two parliamentary elections required to form a new coalition government.

She also said the tourism industry was in better shape than previously thought, providing hope to some Greek businesses.

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